Acts and Regulations

2011, c.141 - Direct Sellers Act

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Full text
Current to 1 January 2024
2011, c.141
Direct Sellers Act
Deposited May 13, 2011
Definitions
1The following definitions apply in this Act.
“Commission” means the Financial and Consumer Services Commission continued under the Financial and Consumer Services Commission Act. (Commission)
“compliance officer” means a person appointed as a compliance officer under section 24.12.(agent de conformité)
“Court of King’s Bench” means The Court of King’s Bench of New Brunswick.(Cour du Banc du Roi)
“Court of Queen’s Bench” Repealed: 2023, c.17, s.60
“Director” means the Director of Consumer Affairs appointed under the Financial and Consumer Services Commission Act and includes any person designated by the Commission or the Director to act on the Director’s behalf.(directeur)
“direct sales contract” means an agreement for the direct sale of goods or services. (contrat de démarchage)
“direct seller” means a person who, whether at the request of a householder or not, direct sells. (démarcheur)
“direct selling” means the house-to-house selling, offering for sale or soliciting of orders for the sale of goods or services. (démarchage)
“investigator” means a person appointed as an investigator under section 24.31.(enquêteur)
“Minister” Repealed: 2013, c.31, s.16
“purchaser” means a person who agrees to purchase goods or services under a direct sales contract. (acheteur)
“regulated activity” means any activity governed by this Act or the regulations.(activité réglementée)
“salesperson” means a direct seller acting as an authorized agent of a vendor. (représentant)
“services” include(services)
(a) the application or installation of goods sold under a direct sales contract, and
(b) the performance of work, labour or services of any type.
“Tribunal” means the Tribunal as defined in the Financial and Consumer Services Commission Act.(Tribunal)
“vendor” means a person who is the seller under a direct sales contract. (vendeur)
R.S.1973, c.D-10, s.1; 1978, c.D-11.2, s.17; 1981, c.20, s.1; 1988, c.58, s.1; 1997, c.23, s.1; 2006, c.16, s.52; 2012, c.39, s.58; 2013, c.31, s.16; 2016, c.36, s.5; 2023, c.6, s.11; 2023, c.17, s.60
Vendor deemed direct seller
2For the purposes of this Act, a vendor shall be deemed to be direct selling whether the vendor is direct selling personally or through a salesperson.
1981, c.20, s.2
APPLICATION
2016, c.36, s.5
Application
3(1)This Act applies only to direct sales contracts concluded after June 1, 1968.
3(2)This Act does not apply to a direct sales contract
(a) solicited, negotiated or concluded at
(i) the direct seller’s, vendor’s or salesperson’s normal business premises, or
(ii) a marketplace, auction, trade fair, agricultural fair or exhibition,
(b) made between a manufacturer or distributor and a wholesaler in respect of goods that the wholesaler intends to resell in the course of the wholesaler’s business,
(c) made between a manufacturer, distributor or wholesaler and a retailer in respect of goods that the retailer intends to resell in the course of the retailer’s business,
(d) under which a retailer is the buyer of goods intended to be used in the retailer’s business but not for resale,
(e) under which the original buyer is a corporation,
(f) solicited, negotiated and concluded without any dealings in person between the purchaser and the direct seller or between the purchaser and the vendor or salesperson,
(g) under which the goods to be delivered consist only of food or food products in a perishable state at the time of delivery, or
(h) if the consideration to be provided by the purchaser is of a value of $100 or less.
3(3)This Act does not apply to a direct sales contract if the direct seller
(a) has not initiated the dealings with the purchaser other than through advertising to the public, and
(b) has resided or has had business premises in the Province for a period of one year immediately before entering into the contract, or, if the direct seller is a corporation or partnership that has not had business premises in the Province for the required period, all its shareholders or partners have resided in the Province for a period of one year immediately before the contract.
3(4)This Act does not apply to the direct selling of any of the following goods or services:
(a) newspapers published periodically at intervals not exceeding seven days;
(b) gasoline or motive fuel within the meaning of the Gasoline and Motive Fuel Tax Act;
(c) primary forest products;
(d) coal;
(e) fishing equipment;
(f) farm implements;
(g) feed grain;
(h) feed supplements;
(i) fertilizer;
(j) weed spray;
(k) nursery stock;
(l) treatment of feed, seed grain or growing crops;
(m) breeding, care or treatment of livestock;
(n) custom tilling, seeding or harvesting;
(o) any goods or services prescribed by regulation.
3(5)This Act does not apply to a direct sales contract entered into by any person in the course of business that the person is authorized to carry on under the Real Estate Agents Act, the Insurance Act, the Securities Act, the Private Occupational Training Act or the Motor Vehicle Act.
R.S.1973, c.D-10, s.3; 1981, c.20, s.3; 1983, c.26, s.1; 1987, c.6, s.19; 1996, c.71, s.18; 1997, c.23, s.2; 2004, c.S-5.5, s.222
LICENCES
2016, c.36, s.5
Vendor’s and salesperson’s licence
4(1)A person shall not direct sell goods or services in the Province unless the person has obtained a licence in accordance with this section.
4(2)The Director may issue a licence to a person authorizing the person to act as a salesperson or vendor on that person making application for the licence in accordance with section 7.
4(3)An application for a licence as a salesperson under subsection (2) shall be accompanied by a notice given by a licensed vendor stating that the applicant, if granted a salesperson’s licence, is authorized to act as a salesperson representing that vendor.
4(4)A salesperson’s licence shall specify the vendor who has given notice under subsection (3) as the principal of the licensee.
4(5)A person licensed to act as a salesperson under this Act
(a) shall not act
(i) as a direct seller except when the person is a genuine agent of a vendor, or
(ii) as a vendor, and
(b) shall act as a salesperson only for the vendor specified in that person’s salesperson’s licence.
4(6)A person licensed to act as a vendor under this Act
(a) shall not act as a salesperson of another vendor, and
(b) may act as a direct seller.
4(7)Repealed: 2016, c.36, s.5
4(8)The Director may restrict a licence issued under subsection (2) to the sale of goods and services specified in the licence, and the person receiving that licence shall sell only those goods and services so specified.
4(9)The Director may at any time restrict a licence by imposing any terms and conditions that he or she considers appropriate on the licence.
4(10)The holder of a licence shall comply with the terms and conditions imposed by the Director under subsection (9) and to any terms and conditions prescribed by regulation for the licence.
4(11)The Director shall not refuse to issue a licence or impose terms and conditions on the licence under subsection (9) without giving the person applying for the licence or the holder of the licence an opportunity to be heard.
R.S.1973, c.D-10, s.4; 1981, c.20, s.4; 1988, c.58, s.3; 2013, c.31, s.16; 2016, c.36, s.5.
Expiry of vendor’s licence
5A licence issued to a vendor under subsection 4(2) expires on the last day of the twelfth month following the issuance of the licence.
1988, c.58, s.4
Expiry of salesperson’s licence
6A licence issued to a salesperson of a vendor under subsection 4(2) expires on the day that the licence issued to the vendor for whom the salesperson is authorized to act expires.
1988, c.58, s.4
Application for licence
7(1)A person may apply in writing to the Director for a licence under this Act.
7(2)Fees for a licence under subsection (1) may be prescribed by regulation.
7(3)The Director may require a person who makes an application under subsection (1) to verify by affidavit or by any other means any statement made by the person in the application of that person.
R.S.1973, c.D-10, s.5; 2013, c.31, s.16
Address for service
8(1)An application under subsection 7(1) shall state the applicant’s address for service in the Province, and any notice given under this Act is deemed for all purposes to be served if delivered or sent by registered mail to the licensee at that address, unless the licensee has notified the Director in writing of a change of address for service under section 15.
8(2)When a licensee has notified the Director under section 15, any notice given under this Act is deemed to be served if delivered or sent by registered mail to the licensee at the latest address for service of which the Director has been notified.
8(3)Except as otherwise provided in subsection 23(3), subsections (1) and (2) do not apply to a notice of cancellation given under section 23.
R.S.1973, c.D-10, s.6; 1997, c.23, s.3; 2013, c.31, s.16
Director’s signature
2013, c.31, s.16
9The signature of the Director on a licence issued under this Act may be printed, stamped or otherwise mechanically reproduced on the licence.
1988, c.58, s.6; 2013, c.31, s.16
Salesperson deemed acting for vendor
10A person who is the holder of a salesperson’s licence under this Act is deemed to be authorized by the vendor specified in the licence to act as the agent of that vendor for the purposes specified in the licence.
R.S.1973, c.D-10, s.7
Licence not transferable
11A licence issued under this Act is not transferable.
R.S.1973, c.D-10, s.8
DIRECT SALES CONTRACTS
2016, c.36, s.5
Requirements for direct sales contracts
12A direct sales contract to which this Act applies shall be in writing and shall
(a) be signed by the vendor or a salesperson of the vendor and by the purchaser,
(b) be in the format and shall contain the information that is required by the regulations,
(c) include a statement of cancellation rights in accordance with the regulations, and
(d) meet any other requirements specified in the regulations.
1997, c.23, s.4
Delivery of direct sales contract
13A person direct selling to a purchaser shall provide to the purchaser a copy of the direct sales contract in accordance with section 12 and the regulations at the time the contract is made.
R.S.1973, c.D-10, s.9; 1981, c.20, s.5; 1997, c.23, s.5
Assignment of direct sales contract
14A vendor who assigns or subcontracts the vendor’s obligation under a direct sales contract shall provide the purchaser with the name and address of the assignee or subcontractor in writing within three days after that assignment or subcontracting.
R.S.1973, c.D-10, s.11; 1981, c.20, s.6
NOTICE OF CHANGE OF ADDRESS
2016, c.36, s.5
Notice of change of address
15A person who holds a vendor’s licence under this Act shall notify the Director in writing of any change in the person’s address for service.
R.S.1973, c.D-10, s.12; 2013, c.31, s.16
PARTIES TO DIRECT SALES CONTRACTS
2016, c.36, s.5
List of names and addresses of parties to direct sales contract
16(1)The Director may request a vendor to provide a list of the names and addresses of the persons with whom the vendor has entered into a direct sales contract.
16(2)When the Director makes a request under subsection (1), the Director shall specify the period of time in respect of which the names and addresses are to be provided.
16(3)When requested to do so by the Director under this section, a vendor shall provide a list of the names and addresses of the persons with whom the vendor has entered into a direct sales contract.
1988, c.58, s.9; 2013, c.31, s.16
SUSPENSION OR CANCELLATION OF LICENCE
2016, c.36, s.5
Suspension or cancellation of licence
17(1)The Director may suspend or cancel a licence held under this Act if the person who holds the licence
(a) violates a provision of this Act or fails to comply with a term, condition or restriction to which the licence of that person is subject,
(b) makes a statement in any information or material submitted, provided, produced, delivered or given to or filed with the Commission, the Director, a compliance officer or any person acting under the authority of the Commission or the Director that is misleading or untrue or does not state a fact that is required to be stated or that is necessary to make the statement not misleading;
(c) is guilty of misrepresentation or fraud in the business in respect of which the licence of that person was issued, or
(d) in the opinion of the Director, has demonstrated the person’s incompetency or untrustworthiness to carry on the business in respect of which the licence of that person was granted.
17(1.1)The Director shall not suspend or cancel a licence under subsection (1) without giving the holder of the licence an opportunity to be heard.
17(2)When the licence of a vendor issued under this Act is suspended or cancelled, the licences of all salespersons of the vendor are also suspended or cancelled.
R.S.1973, c.D-10, s.13; 1983, c.26, s.5; 2013, c.31, s.16; 2016, c.36, s.5.
ADDITIONAL INFORMATION
2016, c.36, s.5
Additional information from applicant for a licence
2016, c.36, s.5
18At any time, the Director may require further information or material to be submitted within a specified time by an applicant for a licence and may require verification by affidavit, or by any other means, of any information or material then or previously submitted.
R.S.1973, c.D-10, s.14; 2013, c.31, s.16; 2016, c.36, s.5
BONDS
2016, c.36, s.5
Delivery and forfeiture of bond
19(1)Before direct selling, a vendor, other than a direct seller referred to in paragraph 3(3)(b), shall deliver to the Director a bond, payable to the Commission, in the amount prescribed by regulation.
19(1.1)The bond delivered under subsection (1) shall be in a form approved or provided by the Director.
19(2)Despite that the Commission has not suffered any loss or damage, a bond delivered to the Director under subsection (1) shall be construed as being a penal bond, and if the bond is forfeited under subsection (3), the amount due and owing as a debt to the Commission by the person bound by it shall be determined as if the Commission suffered a loss or damage that would entitle the Commission to be indemnified to the maximum amount of liability prescribed by the bond.
19(3)A bond delivered under subsection (1) shall be forfeited if
(a) the person in respect of whose conduct the bond is conditioned or any representative, agent or salesperson of that person has been convicted of
(i) an offence under this Act or the regulations, or
(ii) an offence involving fraud or theft or conspiracy to commit an offence involving fraud or theft under the Criminal Code (Canada) if that offence arises out of the business of direct selling,
(b) a judgment has been given in respect of a claim arising out of a direct sales contract against the person in respect of whose conduct the bond is conditioned or against a representative, agent or salesperson of that person and that judgment has not been satisfied, or
(c) the person in respect of whose conduct the bond is conditioned commits an act of bankruptcy, whether or not proceedings have been taken under the Bankruptcy and Insolvency Act (Canada),
and the conviction, judgment or order has become final by reason of lapse of time or of having been confirmed by the highest court to which an appeal may be taken.
19(4)When a bond secured by the deposit of collateral security with the Director is forfeited under subsection (3), the Commission may sell the collateral security at the current market price.
19(5)Subject to subsection (6), the Tribunal may order that any money recovered under a bond delivered under subsection (1) or realized from the sale of any collateral security
(a) be paid over, in accordance with and on the conditions set out in the order,
(i) in trust for those persons who may become judgment creditors of the person named in the bond in respect of claims arising out of direct sales contracts to the clerk of the Court of King’s Bench for the judicial district in which those persons reside, or
(ii) to a trustee, custodian, interim receiver, receiver or liquidator of the person named in the bond, or
(b) be paid over to those persons that may be considered to be entitled to it in respect of direct sales contracts concluded with the person named in the bond or a representative, agent or salesperson of that person.
19(6)When money has been recovered by the Commission under a bond delivered under subsection (1) or has been realized by the Commission from the sale of any collateral security, the Commission may deduct from that money and retain the amount of the costs incurred by the Commission in connection with the recovery or realization of the money and the distribution of it, including the costs of an investigation of a claim made on the money.
19(7)Any money not deducted by the Commission under subsection (6) nor paid over under an order of the Tribunal under subsection (5) shall be refunded to the surety or obligor under the bond.
R.S.1973, c.D-10, s.15; 1979, c.41, s.39; 1981, c.20, s.7; 1983, c.26, s.6, s.7; 1984, c.22, s.1; 2013, c.31, s.16; 2016, c.36, s.5; 2023, c.17, s.60
Liability under bond
20A bond given under this Act shall be deemed to be in effect for a period of two years following the date on which the bond would otherwise terminate by lapse, expiry or cancellation, but liability under the bond is limited to acts or omissions before that date of the person in respect of whose conduct the bond is conditioned or a representative, agent or salesperson of that person; and a clause to this effect shall be deemed to be inserted in every bond given for the purposes of this Act.
1983, c.26, s.8
APPEALS
2016, c.36, s.5
Appeal
21(1)A person who is directly affected by a decision made under section 4, 17, 19 or 28 may appeal it to the Tribunal within 30 days after the date of the decision.
21(1.1)Despite subsection (1), the Tribunal may extend the period for appealing a decision, before or after the expiration of the time, if it is satisfied that there are reasonable grounds for an extension.
21(2)Repealed: 2013, c.31, s.16
21(3)Repealed: 2017, c.48, s.7
R.S.1973, c.D-10, s.16; 1979, c.41, s.39; 1988, c.58, s.11; 2013, c.31, s.16; 2017, c.48, s.7
CANCELLATION OF DIRECT SALES CONTRACTS
2016, c.36, s.5
Cancellation of direct sales contract
22(1)A purchaser may cancel a direct sales contract within ten days after the purchaser is provided with a copy of the direct sales contract under section 13.
22(2)A purchaser may cancel a direct sales contract within one year after entering into the contract if
(a) the vendor or the salesperson of the vendor was not licensed under this Act at the time the purchaser entered into the direct sales contract,
(b) the vendor or the salesperson of the vendor has in respect of the direct sales contract failed to comply with a term, condition or restriction to which the vendor’s or salesperson’s licence is subject,
(c) the vendor or the salesperson of the vendor does not provide to the purchaser a direct sales contract and statement of cancellation rights that are in accordance with section 12 and the regulations, or
(d) the vendor or the salesperson of the vendor fails to
(i) deliver the goods within 30 days after
(A) the delivery date specified in the direct sales contract or an amended delivery date specified in a subsequent written agreement, or
(B) if the delivery date is not specified in the direct sales contract or a subsequent written agreement, the date the direct sales contract is made, or
(ii) begin to provide the services within 30 days after
(A) the commencement date specified in the direct sales contract or an amended commencement date specified in a subsequent written agreement, or
(B) if the commencement date is not specified in the direct sales contract or a subsequent written agreement, the date the direct sales contract is made.
22(3)A purchaser who accepts delivery of goods or the provision of services under a direct sales contract after the 30-day period referred to in paragraph (2)(d) is not entitled to cancel the direct sales contract under that paragraph.
22(4)If in the opinion of a court it is inequitable that paragraph (2)(d) should apply, the court may make the order that it considers appropriate.
22(5)The cancellation rights under this section in respect of a direct sales contract are in addition to and do not affect any other rights or remedy the purchaser has under or in respect of the direct sales contract or at law in the province or territory in which the purchaser resides.
22(6)If credit is extended or arranged by a vendor or a salesperson of the vendor in connection with a direct sales contract and the credit agreement is conditional on the direct sales contract, a cancellation of the direct sales contract under this section has the effect of cancelling the credit agreement.
R.S.1973, c.D-10, s.17; 1981, c.20, s.8; 1983, c.26, s.9; 1997, c.23, s.7
Notice of cancellation
23(1)A direct sales contract is cancelled under section 22 when the purchaser gives a notice of cancellation in accordance with this section.
23(2)A purchaser may give a notice of cancellation to the direct seller, vendor or a salesperson of the vendor by
(a) delivering it personally to the direct seller, vendor or salesperson of the vendor, or
(b) sending it to the direct seller, vendor or salesperson of the vendor by registered mail, prepaid courier, telephone transmission producing a facsimile or any other method that permits the purchaser to provide evidence of the cancellation.
23(3)A notice of cancellation shall be deemed to be given to the direct seller, vendor or a salesperson of the vendor if
(a) it is delivered or sent to the address for notice specified for that purpose in the direct sales contract, or
(b) if an address for notice is not specified in the direct sales contract, the notice of cancellation is delivered or sent to the address for service provided for in section 8.
23(4)A notice of cancellation that is given in accordance with paragraph (2)(b) shall be deemed to be given when it is sent.
23(5)Subject to subsections (2), (3) and (4), a notice of cancellation is adequate if it indicates the intention of the purchaser to cancel the direct sales contract.
1997, c.23, s.8
Obligations on cancellation
24(1)When a direct sales contract is cancelled under section 22,
(a) within 15 days after the notice of cancellation has been delivered or sent, the direct seller or vendor shall
(i) refund the money received under the direct sales contract to the purchaser, and
(ii) if goods were taken by the direct seller or vendor as a trade-in, return them to the purchaser in as good a condition as they were in when they were taken in trade, or if the direct seller or vendor is not able to do that, pay to the purchaser the greater of
(A) the market value of the goods at the time they were taken in trade, and
(B) the price or value of the goods specified in the direct sales contract, and
(b) in the case of a direct sales contract respecting goods, on receiving everything to be refunded, returned or paid to the purchaser under paragraph (a), the purchaser shall deliver up the goods to the direct seller or vendor in as good a condition as they were in when they were delivered.
24(2)When a direct sales contract is cancelled under section 22, the direct seller or vendor is entitled to reasonable compensation for the portion of the goods consumed by the purchaser and for the services partially performed by the direct seller or vendor but the direct seller’s or vendor’s rights do not arise under this subsection until the direct seller or vendor complies with subsection (1).
1997, c.23, s.8
RECORD KEEPING, ADVERTISING AND COMPLIANCE REVIEWS
2016, c.36, s.5
Record-keeping
2016, c.36, s.5
24.1(1)The following definition applies in this section.
“regulatory authority” means a person empowered by the laws of a jurisdiction to regulate the activities of a direct seller or a vendor.
24.1(2)A direct seller or a vendor shall keep books, records and documents that are necessary for the proper recording of its business and affairs and shall keep any other books, records and documents that are otherwise required under this Act or the regulations.
24.1(3)A direct seller or a vendor shall keep the books, records and documents at a safe location and in a durable form.
24.1(4)A direct seller or a vendor shall retain the books, records and documents for a minimum period of seven years after the date of the transaction to which the books, records or documents relate.
24.1(5)A direct seller or a vendor shall deliver to the Director, or to any other employee of the Commission, at any time that the Director or other employee requires
(a) any of the books, records and documents that are required to be kept by the direct seller or vendor under this Act or the regulations, and
(b) any filings, reports or other communications made to any other regulatory authority.
2016, c.36, s.5
False or misleading advertisement
2016, c.36, s.5
24.11(1)No holder of a licence issued under this Act shall make any false, misleading or deceptive statements in any advertisement, circular, pamphlet or similar material prepared or used in respect of a regulated activity.
24.11(2)If, in the opinion of the Director, a holder of a licence issued under this Act has made a false, misleading or deceptive statement in any advertisement, circular, pamphlet or similar material referred to in subsection (1), the Director may order the holder of the licence to stop using that material immediately.
2016, c.36, s.5
Compliance review
2016, c.36, s.5
24.12(1)The Commission may appoint in writing a person as a compliance officer for the purpose of ensuring compliance with this Act and the regulations.
24.12(2)The Commission shall issue to every compliance officer a certificate of appointment and every compliance officer, in the execution of his or her duties under this Act or the regulations, shall produce his or her certificate of appointment on request.
24.12(3)For the purpose of determining whether this Act and the regulations are being complied with, a compliance officer, in carrying out a compliance review, may
(a) enter the premises of a direct seller or vendor during normal business hours,
(b) require a direct seller or vendor, an officer or employee of either of them or a salesperson of a vendor to produce for inspection, examination, auditing or copying any books, records or documents relating to the business or affairs of the direct seller or vendor,
(c) inspect, examine, audit or copy the books, records or documents relating to the business or affairs of a direct seller or vendor, and
(d) question a direct seller or vendor, an officer or employee of either of them or a salesperson of a vendor in relation to the business or affairs of the direct seller or vendor.
24.12(4)In carrying out a compliance review, a compliance officer may
(a) use a data processing system at the premises where the books, records or documents are kept,
(b) reproduce any book, record or document, and
(c) use any copying equipment at the premises where the books, records or documents are kept to make copies of any book, record or document.
24.12(5)A compliance officer may carry out a compliance review within or outside the Province.
24.12(6)A compliance officer shall not enter a private dwelling under subsection (3) unless the compliance officer has the consent of the occupier or has obtained an entry warrant under the Entry Warrants Act.
24.12(7)Before or after attempting to enter or to have access to any premises, a compliance officer may apply for an entry warrant under the Entry Warrants Act.
24.12(8)The Commission may, in circumstances prescribed by regulation, require a direct seller or vendor in respect of which a compliance review was carried out to pay the Commission any fee prescribed by regulation and to reimburse the Commission for any expenses prescribed by regulation.
2016, c.36, s.5
Removal of documents
2016, c.36, s.5
24.2(1)A compliance officer who removes books, records or documents to make a copy or extract of them or any part of them shall give a receipt to the occupier of the premises for the books, records or documents removed and return the books, records or documents as soon as possible after the making of copies or extracts.
24.2(2)A copy or extract of any book, record or document related to a compliance review and purporting to be certified by a compliance officer is admissible in evidence in any action, proceeding or prosecution and is proof, in the absence of evidence to the contrary, of the original without proof of the appointment, authority or signature of the person purporting to have certified the copy or extract.
2016, c.36, s.5
Misleading statements
2016, c.36, s.5
24.21No person shall knowingly make a false or misleading statement, either orally or in writing, to a compliance officer while the compliance officer is engaged in carrying out his or her duties under this Act or the regulations.
2016, c.36, s.5
Obstruction
2016, c.36, s.5
24.22(1)No person shall obstruct or interfere with a compliance officer who is carrying out or attempting to carry out a compliance review under this Act, or withhold, destroy, conceal, alter or refuse to produce any information or thing reasonably required by a compliance officer for the purposes of the compliance review.
24.22(2)A refusal of consent to enter a private dwelling is not and shall not be considered to be interfering with or obstructing within the meaning of subsection (1), except if an entry warrant has been obtained.
2016, c.36, s.5
INVESTIGATIONS
2016, c.36, s.5
Provision of information to Director
2016, c.36, s.5
24.3(1)The Director may make an order under subsection (2)
(a) for the administration of this Act or the regulations, or
(b) to assist in the administration of similar legislation of another jurisdiction.
24.3(2)By an order applicable generally or to one or more persons named or otherwise described in the order, the Director may require any of the following persons to provide information or to produce books, records or documents or classes of books, records or documents specified or otherwise described in the order within the time or at the intervals specified in the order:
(a) the holder of a licence issued under this Act;
(b) a former holder of a licence issued under this Act; or
(c) any person that does not hold a licence under this Act and that is, or the Director has reason to suspect is, carrying out a regulated activity.
24.3(3)The Director may require that the authenticity, accuracy or completeness of information provided or of a book, record or document or a class of books, records or documents produced pursuant to an order under subsection (2) be verified by affidavit.
24.3(4)The Director may require that the information provided or that the books, records or documents or classes of books, records or documents produced pursuant to an order made under subsection (2) be delivered in electronic form, if the information or the books, records or documents or classes of books, records or documents are already available in that form.
2016, c.36, s.5
Investigation order
2016, c.36, s.5
24.31(1)The Commission may, by order, appoint a person as an investigator to make any investigation that the Commission considers expedient
(a) for the administration of this Act or the regulations, or
(b) to assist in the administration of similar legislation of another jurisdiction.
24.31(2)In its order, the Commission shall specify the scope of an investigation to be carried out under subsection (1).
2016, c.36, s.5
Powers of investigator
2016, c.36, s.5
24.32(1)An investigator may, with respect to the person who is the subject of the investigation, investigate, inspect and examine
(a) the business or affairs of that person,
(b) any books, records, documents or communications connected with that person, and
(c) any property or assets owned, acquired or disposed of, in whole or in part, by that person or by a person acting on behalf of or as agent for that person.
24.32(2)For the purposes of an investigation under this Act, an investigator may inspect and examine any book, record, document or thing, whether in possession or control of the person in respect of whom the investigation is ordered or any other person.
24.32(3)An investigator making an investigation under this Act may, on production of the order appointing him or her,
(a) enter the business premises of any person named in the order during normal business hours and inspect and examine any book, record, document or thing that is used in the business of that person and that relates to the order,
(b) require the production of any book, record, document or thing referred to in paragraph (a) for inspection or examination, and
(c) on giving a receipt, remove the book, record, document or thing inspected or examined under paragraph (a) or (b) for the purpose of further inspection or examination.
24.32(4)Inspection or examination under this section shall be completed as soon as possible and the books, records, documents or things shall be returned promptly to the person who produced them.
24.32(5)No person shall withhold, destroy, conceal, alter or refuse to give any information or withhold, destroy, conceal, alter or refuse to produce any book, record, document or thing reasonably required under subsection (3) by an investigator.
2016, c.36, s.5
Power to compel evidence
2016, c.36, s.5
24.4(1)An investigator making an investigation under this Act has the same power to summon and enforce the attendance of witnesses, to compel witnesses to give evidence under oath or in any other manner and to compel witnesses to produce books, records, documents and things or classes of books, records, documents and things as the Court of King’s Bench has for the trial of civil actions.
24.4(2)On the application of an investigator to the Court of King’s Bench, the failure or refusal of a person to attend, to take an oath, to answer questions or to produce books, records, documents and things or classes of books, records, documents and things in the custody, possession or control of the person makes the person liable to be committed for contempt as if in breach of an order or judgment of the Court of King’s Bench.
24.4(3)A person giving evidence at an investigation conducted under this section may be represented by legal counsel.
24.4(4)Testimony given by a person under this section shall not be admitted into evidence against that person in any prosecution other than for perjury in the giving of that testimony or the giving of evidence contradictory to that testimony.
2016, c.36, s.5; 2023, c.17, s.60
Investigators authorized as peace officers
2016, c.36, s.5
24.41Every investigator in carrying out his or her duties under this Act and the regulations is a person employed for the preservation and maintenance of the public peace and has and may exercise all the powers, authorities and immunities of a peace officer as defined in the Criminal Code (Canada).
2016, c.36, s.5
Seized property
2016, c.36, s.5
24.42(1)On request to the investigator by the person who, at the time of the seizure, was in lawful possession of books, records, documents or things seized under this Act, the books, records, documents or things seized shall, at a time and place mutually convenient to the person who was in lawful possession of them at the time of the seizure and the investigator, be made available for consultation and copying by the person.
24.42(2)If books, records, documents or things are seized under this Act and the matter for which the books, records, documents or things were seized is concluded, the investigator shall return those books, records, documents or things to the person who was in lawful possession of them at the time of the seizure within 60 days after the day that the matter is concluded.
24.42(3)If books, records, documents or things are seized under this Act and the person who was in lawful possession of the books, records, documents or things at the time of the seizure alleges that the books, records, documents or things are not relevant in respect of the matter for which they were seized, that person may apply by notice of motion to the Court of King’s Bench for the return of the books, records, documents or things.
24.42(4)On a motion under subsection (3), the Court of King’s Bench shall order the return of any books, records, documents or things that it determines are not relevant to the matter for which they were seized to the person who was in lawful possession of the books, records, documents or things at the time of the seizure.
2016, c.36, s.5; 2023, c.17, s.60
Report of investigation
2016, c.36, s.5
24.5(1)If an investigation has been made under this Act, the investigator shall, at the request of the Commission, provide a report of the investigation to the Commission or any transcripts of evidence or any material or other things in the investigator’s possession relating to the investigation.
24.5(2)A report that is provided to the Commission under this section is privileged and is inadmissible in evidence in any action or proceeding.
2016, c.36, s.5
Prohibition against disclosure
2016, c.36, s.5
24.51(1)For the purpose of protecting the integrity of an investigation under this Act, the Commission may make an order that applies for the duration of the investigation, prohibiting a person from disclosing to any person other than the person’s lawyer the following information:
(a) the fact that an investigation is being conducted;
(b) the name of any person examined or sought to be examined;
(c) the nature or content of any questions asked;
(d) the nature or content of any demands for the production of any document or other thing; or
(e) the fact that any document or other thing was produced.
24.51(2)An order under subsection (1) does not apply to disclosures authorized by the regulations or by the Director in writing.
24.51(3)An investigator making an investigation under this Act may make, or authorize the making of, any disclosure of information that may be required for the effectual conduct of the investigation.
2016, c.36, s.5
Non-compellability
2016, c.36, s.5
24.52None of the following persons is compellable to give evidence in any court or in any proceeding of a judicial nature concerning any information that comes to the knowledge of the person in the exercise of the powers or performance of the duties of that person in relation to an investigation under this Act:
(a) an investigator;
(b) the Commission;
(c) a member of the Commission;
(d) an employee of the Commission;
(e) a member of the Tribunal; and
(f) a person engaged by the Commission under section 18 of the Financial and Consumer Services Commission Act.
2016, c.36, s.5
ENFORCEMENT
2016, c.36, s.5
Offences generally
2016, c.36, s.5
24.6(1)A person who does any of the following commits an offence, and is liable on conviction, for each offence, if an individual, to a fine of not more than $25,000 or to imprisonment for a term of not more than one year, or to both, and if a person other than an individual, to a fine of not more than $100,000:
(a) makes a statement in any information or material submitted, provided, produced, delivered or given to or filed with the Commission, the Director, a compliance officer, an investigator or any person acting under the authority of the Commission or the Director that is misleading or untrue or does not state a fact that is required to be stated or that is necessary to make the statement not misleading;
(b) makes a statement in any information or material required to be submitted, provided, produced, delivered, given or filed under this Act or the regulations that is misleading or untrue or does not state a fact that is required to be stated or that is necessary to make the statement not misleading;
(c) withholds, destroys, conceals, alters or refuses to produce any information or thing reasonably required for the purposes of an administrative proceeding under this Act or the regulations;
(d) violates or fails to comply with a provision of this Act that is listed in Schedule A;
(e) violates or fails to comply with a decision, ruling, order, temporary order or direction of the Commission, the Director or the Tribunal made or given under this Act or the regulations;
(f) violates or fails to comply with a written undertaking made by that person to the Commission, the Director or the Tribunal under this Act or the regulations; or
(g) violates or fails to comply with any provision of the regulations.
24.6(2)Without limiting the availability of other defences, no person commits an offence under paragraph (1)(a) or (b) if
(a) the person did not know and in the exercise of reasonable diligence could not have known that the statement was misleading or untrue or that it omitted to state a fact that was required to be stated or that was necessary to make the statement not misleading in light of the circumstances in which it was made, and
(b) on becoming aware that the statement was misleading or untrue or that it omitted to state a fact that was required to be stated or that was necessary to make the statement not misleading, the person notified the Commission.
2016, c.36, s.5
Misleading or untrue statements
2016, c.36, s.5
24.61In carrying on a regulated activity, no person shall make a statement that the person knows or reasonably ought to know is misleading or untrue or does not state a fact that is required to be stated or that is necessary to make the statement not misleading.
2016, c.36, s.5
Interim preservation of property
2016, c.36, s.5
24.62(1)On the application of the Commission, the Tribunal may make one or more of the following orders if the Tribunal considers it expedient for the administration of this Act or the regulations or to assist in the administration of similar legislation of another jurisdiction:
(a) an order directing a person having on deposit or under control or for safekeeping any funds, securities or property to retain the funds, securities or property and to hold them;
(b) an order directing a person to refrain from withdrawing the person’s funds, securities or property from any other person having any of them on deposit or under control or for safekeeping; or
(c) an order directing a person to hold all funds, securities or property of clients or others in the person’s possession or control in trust for any interim receiver, custodian, trustee, receiver, receiver and manager or liquidator appointed under the Business Corporations Act, the Companies Act, the Judicature Act, the Bankruptcy and Insolvency Act (Canada), the Winding-up and Restructuring Act (Canada) or any other Act of the Legislature or of Canada.
24.62(2)An order under subsection (1) that names a financial institution shall apply only to the branches of the financial institution identified in the order.
24.62(3)An order under subsection (1) is effective for seven days after its making, but the Commission may apply to the Court of King’s Bench to continue the order or for any other order that the Court of King’s Bench considers appropriate.
24.62(4)An order under subsection (1) may be made ex parte but, in that event, copies of the order shall be sent without delay by any means that the Tribunal determines to all persons named in the order.
24.62(5)A person in receipt of an order under subsection (1) who is in doubt as to the application of the order to any funds, securities or property or as to a claim being made to that person by any person not named in the order may apply to the Tribunal for direction or clarification.
24.62(6)The Tribunal, on the application of the Commission or of a person directly affected by the order, may revoke an order under subsection (1) or permit the release of any funds, securities or property in respect of which the order was made.
24.62(7)A notice of an order under subsection (1) may be registered or recorded against the lands or claims identified in the order by submitting the notice to the appropriate registry office established under the Registry Act or to the appropriate land titles office established under the Land Titles Act.
24.62(8)The Tribunal may order a notice submitted under subsection (7) to be revoked or modified and, if an order is made, the Commission shall submit a copy of the revocation or modification to the appropriate registry office or land titles office.
24.62(9)On submission of a notice under subsection (7) or a copy of a written revocation or modification under subsection (8), the notice or the copy of the revocation or modification shall be registered or recorded in the registry office or land titles office, as the case may be, by the registrar and has the same effect as the registration or recording of a certificate of pending litigation.
2016, c.36, s.5; 2023, c.2, s.174; 2023, c.17, s.60
Orders in the public interest
2016, c.36, s.5
24.7(1)On the application of the Commission, the Tribunal, if in its opinion it is in the public interest to do so, may make one or more of the following orders:
(a) an order that a licence be suspended or restricted for the period specified in the order or be cancelled, or that terms and conditions be imposed on the licence;
(b) an order that any exemptions contained in this Act or the regulations do not apply to a person permanently or for any period specified in the order;
(c) an order that a person cease conducting all or any regulated activities;
(d) an order that a person submit to a review of the person’s practices and procedures relating to regulated activities and institute any changes directed by the Tribunal;
(e) if the Tribunal is satisfied that this Act or the regulations have not been complied with, an order that any document or statement described in the order
(i) be provided by a person,
(ii) not be provided to a person, or
(iii) be amended to the extent that amendment is practicable;
(f) an order that a person be reprimanded;
(g) an order that a person amend, in the manner specified in the order, any information or material of any kind described in the order that is disseminated to the public;
(h) an order that a person cease violating or comply with, and that the directors and officers of the person cause the person to cease violating or to comply with, this Act and the regulations;
(i) if a person has not complied with this Act or the regulations, an order requiring the person to disgorge to the Commission any amounts obtained as a result of the non-compliance.
24.7(2)The Tribunal may impose any terms and conditions that the Tribunal considers appropriate on an order under this section.
24.7(3)A person who is the subject of an order made under this section shall comply with any terms and conditions imposed on the order.
24.7(4)Unless the parties and the Tribunal consent, no order shall be made under this section without a hearing.
24.7(5)Despite subsection (4), if in the opinion of the Tribunal the length of time required to hold a hearing could be prejudicial to the public interest, the Tribunal, without a hearing, may make a temporary order under paragraph (1)(a), (b), (c) or (f).
24.7(6)The temporary order shall take effect immediately and shall expire on the fifteenth day after its making unless extended by the Tribunal.
24.7(7)The Tribunal may extend a temporary order until the hearing is concluded if a hearing is commenced within the 15-day period.
24.7(8)The Commission shall without delay give written notice of an order or temporary order made under this section to any person directly affected by the order or temporary order.
2016, c.36, s.5
Administrative penalty
2016, c.36, s.5
24.71(1)On the application of the Commission and after conducting a hearing, the Tribunal may order a person to pay an administrative penalty of, in the case of an individual, not more than $15,000, and in the case of a person other than an individual, not more than $75,000, if the Tribunal
(a) determines that the person has violated or failed to comply with this Act or the regulations, and
(b) is of the opinion that it is in the public interest to make the order.
24.71(2)The Tribunal may make an order under this section despite the imposition of any other penalty on the person or the making of any other order by the Tribunal, the Commission or the Director related to the same matter.
2016, c.36, s.5
Directors and officers
2016, c.36, s.5
24.8If a person other than an individual violates or has not complied with this Act or the regulations, a director or officer of the person who authorized, permitted or acquiesced in the violation or non-compliance shall be deemed also to have violated or not complied with this Act or the regulations, whether or not any proceeding has been commenced against the person under this Act or the regulations or any order has been made against the person under section 24.7.
2016, c.36, s.5
Resolution of administrative proceedings
2016, c.36, s.5
24.81(1)Despite any other provision of this Act or the regulations, an administrative proceeding conducted by the Commission, the Tribunal or the Director under this Act or the regulations may be disposed of by
(a) an agreement approved by the Commission, the Tribunal or the Director, as the case may be,
(b) a written undertaking made by a person to the Commission, the Tribunal or the Director that has been accepted by the Commission, the Tribunal or the Director, as the case may be, or
(c) a decision of the Commission, the Tribunal or the Director, as the case may be, made without a hearing or without compliance with a requirement of this Act or the regulations, if the parties have waived the hearing or compliance with the requirement.
24.81(2)An agreement, written undertaking or decision made, accepted or approved under subsection (1) may be enforced in the same manner as a decision made by the Commission, the Tribunal or the Director under any other provision of this Act or under the regulations.
2016, c.36, s.5
Limitation period
2016, c.36, s.5
24.9No proceeding under this Act or the regulations shall be commenced more than six years after the date of the occurrence of the last event on which the proceeding is based.
2016, c.36, s.5
Enforcement
Repealed: 2016, c.36, s.5
2016, c.36, s.5
25Repealed: 2016, c.36, s.5
R.S.1973, c.D-10, s.18; 2013, c.31, s.16; 2016, c.36, s.5
Inspection and removal of records
Repealed: 2016, c.36, s.5
2016, c.36, s.5
26Repealed: 2016, c.36, s.5
1988, c.58, s.13; 2013, c.31, s.16; 2016, c.36, s.5
MISCELLANEOUS AND GENERAL
2016, c.36, s.5
Conflict with the Right to Information and Protection of Privacy Act
2016, c.36, s.5
26.1If a provision of this Act is inconsistent or in conflict with a provision of the Right to Information and Protection of Privacy Act, the provision of this Act prevails.
2016, c.36, s.5
Production of licence on request
27A person licensed under this Act shall produce the licence of that person for inspection when requested to do so by any person with whom that person negotiates a direct sales contract.
R.S.1973, c.D-10, s.19
Contract regarding goods or services not in compliance with any Act or regulation
28(1)No direct seller, salesperson of a vendor or vendor shall enter into a direct sales contract in relation to
(a) goods that on delivery do not comply with an Act or regulation of the Legislature or of the Government of Canada, or
(b) services that on completion do not comply with an Act or regulation of the Legislature or of the Government of Canada.
28(2)If the Director has reason to believe that a person who holds a licence under this Act has violated subsection (1), the Director may suspend or cancel that licence.
28(3)When a person applies for a licence under section 7 and the Director has reason to believe that if a licence is issued under this Act a violation of subsection (1) may occur, the Director may refuse to issue the licence.
28(4)The Director shall not refuse to issue a licence or suspend or cancel a licence under this section without giving the person applying for the licence or the holder of the licence an opportunity to be heard.
1988, c.58, s.14; 2013, c.31, s.16; 2016, c.36, s.5
Certificate evidence
29(1)The Director may sign a certificate stating that on a specified day
(a) a vendor or a salesperson or any other person named in the certificate was or was not licensed under this Act,
(b) a licence was issued under this Act to a vendor or a salesperson, or
(c) the licence of a vendor or salesperson issued under this Act was suspended, cancelled or reinstated.
29(2)A certificate under subsection (1) is admissible in evidence and is proof, in the absence of evidence to the contrary, of the facts stated in the certificate without proof of the appointment, authority or signature of the person signing the certificate.
R.S.1973, c.D-10, s.20; 2013, c.31, s.16
Onus of proof
30In a proceeding in which a question arises as to whether this Act applies to a direct sales contract, the onus is on the direct seller to establish that the Act does not apply to that contract.
1981, c.20, s.9
Waiver of provisions of Act
31An agreement, oral or written, express or implied, that any of the provisions of this Act or the regulations do not apply or that any benefit or remedy provided by this Act or the regulations is not available, or that in any way limits, modifies or abrogates or in effect limits, modifies or abrogates any of those benefits or remedies, is void and money paid under or by reason of the agreement is recoverable in a court of competent jurisdiction.
R.S.1973, c.D-10, s.21
Direct sales contract for several items
32If several items of goods or several services are purchased as part of one transaction, that transaction is deemed to be one of direct sales contract for the purposes of this Act.
R.S.1973, c.D-10, s.22
Offences and penalties
Repealed: 2016, c.36, s.5
2016, c.36, s.5
33Repealed: 2016, c.36, s.5
R.S.1973, c.D-10, s.25; 1975, c.19, s.1; 1983, c.26, s.11; 1990, c.61, s.34; 2016, c.36, s.5
Limitation period for prosecution
Repealed: 2016, c.36, s.5
2016, c.36, s.5
34Repealed: 2016, c.36, s.5
R.S.1973, c.D-10, s.26; 2016, c.36, s.5
Administration
35The Commission is responsible for the administration of this Act.
R.S.1973, c.D-10, s.2; 2013, c.31, s.16
Regulations
36The Lieutenant-Governor in Council may make regulations
(a) prescribing licensing requirements under this Act;
(b) prescribing fees payable for licences under this Act;
(c) exempting any person or class of persons from any provision of this Act;
(d) prescribing terms and conditions of licences under this Act;
(e) respecting direct sales contracts including but not limited to the format and content of direct sales contracts, the information to be included in direct sales contracts, the statement of cancellation rights to be included in direct sales contracts and any other requirements in relation to direct sales contracts and statements of cancellation rights;
(f) exempting any goods or services from the provisions of this Act;
(f.1) requiring, for the purposes of subsection 24.1(2), that certain books, records or documents be kept;
(f.2) authorizing disclosures for the purposes of subsection 24.51(2);
(f.3) prescribing circumstances, fees and expenses for the purposes of subsection 24.12(8);
(g) for the better administration of this Act.
R.S.1973, c.D-10, s.24; 1981, c.20, s.11; 1997, c.23, s.9; 2016, c.36, s.5
SCHEDULE A
Number of provision
4(1)
4(5)(a)
4(5)(b)
4(6)(a)
4(10)
13
14
15
16(3)
19(1)
24(1)(a)
24.1(2)
24.1(3)
24.1(4)
24.1(5)(a)
24.1(5)(b)
24.11(1)
24.21
24.22(1)
24.32(5)
24.61
24.7(3)
27
28(1)
1990, c.61, s.34; 1997, c.23, s.10; 2016, c.36, s.5
N.B. This Act was proclaimed and came into force September 1, 2011.
N.B. This Act is consolidated to June 16, 2023.